Leading Clubs Report Growth in Third Quarter

BOSTON -- For 18 mid-size club companies, the third quarter of 2007 was a time of financial growth, according to a survey of health and sports club companies conducted by Industry Insights for the International Health, Racquet & Sportsclub Association (IHRSA). The companies collectively grew their revenue an average of 18.1 percent to $16.6 million in revenue for the third quarter.

The 18 companies represent 194 facilities, or an average of 11 clubs per company.

The companies also reported improved same-store revenue for clubs that have been in operation for at least two years. The same-store revenue increased by an average of 5.4 percent to $7 million.

On a per club analysis, the club owners grew their total revenue an average of 5.2 percent to $1.6 million. Nearly 70 percent of the total revenue was fueled by membership dues revenue, which totaled $1.1 million and grew 4 percent since the third quarter of 2006. Non-dues revenue, which totaled $540,000, reported a 7.8 percent growth over the same period last year.

“We are pleased to report that these leading health clubs consistently grew membership and non-dues revenues while holding gross margins at 29 percent for the third quarter,” says Joe Moore, IHRSA’s president and CEO.

IHRSA has noted the same growth pattern for the first three quarters of 2007, says Katie Rollauer, IHRSA senior manager of research.

“We anticipate a positive outlook for the year end due to a historical increase in membership sales, which typically occurs late in the fourth quarter,” says Rollauer.